- Some capital market operators on Monday blamed the Central Bank of Nigeria
(CBN) for the sustained price depreciation of listed equities at the nation’s
They spoke in separate interviews in Lagos, noting that the CBN’s tight
monetary policies impacted the market negatively.
They said that the investing public was seriously concerned over the
liquidity squeeze foisted on the market by the bank’s policies.
Emeka Madubuike, President,
Association of Stockbroking Houses of Nigeria (ASHON), said that the
association was not happy with the current market trend.
Madubuike said the CBN’s proposed increase of Cash Reserve Requirement (CRR)
on the public sector to 100 percent has generated fear among operators.
He said that the development has created market instability and equity sell
Madubuike, who is also the Managing Director of Compass Securities and
Investment Ltd., said that the U.S. quantitative tapering contributed to the
market’s instability with the exit of foreign investors.
He said that the rapid exit of foreign investors and the attendant
capital flight had made it imperative for active participation of more domestic
investors' in the market.
According to him, the association will continue to map out strategies, aimed
at increasing local participation and enhanced market stability.
Also speaking, Sehinde Adenagbe, Managing Director, Standard Union
Securities Ltd., said that the market value creation was not encouraging.
Adenagbe attributed the downward trend in the market to CBN's issues
bordering on CRR and developments at the international financial industry.
He said that banks were exiting the market in preparation for the CBN’s
recent pronouncement on CRR.
Adenagbe added that scarcity of funds in the economy contributed to the
development in the capital market.
He expressed his optimism that the market would likely rebound in the next
couple of days.
David Adonri, the Chief Executive Office of Lambeth Trust & Investment,
said that tight monetary policy would continue to slow down the equities
Adonri said that market regulators and operators needed to work together to
enhance market liquidity and stability.-
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